Archive for April, 2010

Operation Spring Cleaning. Anti-Counterfeiting Stings From Around The Country.

COUNTERFEIT PRODUCTS WORTH $263 MILLION SEIZED IN TWO MAJOR INVESTIGATIONS. The Washington Post (4/27/2010) reports on the announcement Monday of the seizure of “$263 million worth of counterfeit products — much of it smuggled through Baltimore — following two long-term investigations. The National Intellectual Property Rights Coordinator Center, a partnership among several government agencies, spearheaded the so-called Operation Spring Cleaning, which resulted in more than $44 million in seizures of fake products, including DVDs, circuit breakers, luxury goods and medications, from ports across the country over the past three weeks. In addition, 45 people were arrested on federal and state counterfeiting charges as part of the operation. Immigration and Customs Enforcement officials also seized $219 million in counterfeit merchandise made in Asia and shipped through Baltimore this month as part of a separate investigation over several months.”

U.S. Seizes Big Batches of Fake Goods. Wall Street Journal (4/26/2010) notes U.S. law enforcement “made their biggest-ever seizures of counterfeit goods this month in two operations that netted more than $240 million in total as part of a broader federal offensive against the trafficking of pirated products. Federal, state and local law enforcement officials, part of the National Intellectual Property Rights Coordination Center, confiscated about $40 million worth of counterfeit goods, including fake Rolex watches, Coach handbags, and Nike shoes, as well as pirated DVDs and fake pharmaceutical products, in a sweep of more than 30 U.S. cities. And as part of a separate, long-running investigation, federal officials confiscated $200 million in fake goods made in Asia and smuggled through the port of Baltimore. “Intellectual property theft steals a whole lot. It steals jobs, creativity, it funds organized crime, and it’s a serious risk to public safety,” said John Morton, assistant secretary for U.S. Immigration and Customs Enforcement, or ICE, at the Department of Homeland Security.”

Pirated DVD Salesmen Busted. The McAllen (TX) Monitor (4/27/2010) reports, “Three pirated DVD salesman arrested at a Starr County flea market are among 45 people netted in a nationwide dragnet against counterfeiting operations, US Immigration and Customs Enforcement announced Monday. Agents detained Mauro Bazan Jr., Esteban Trevino Ramirez and Rodolfo Sanchez Vela on April 17 after finding them in possession of nearly 6,700 forged DVDs. Legitimate DVDs would be worth an estimated $127,000.” The men were arrested “as part of the nationwide ‘Operation Spring Cleaning’ which resulted in the seizure of $263 million in fake merchandise in cities such as San Antonio, Houston, Dallas, Seattle, New York, Miami and Detroit.”

Fake Rolexes Bulldozed In Philadelphia. The Philadelphia Daily News (4/27/2010) reports on the bulldozing on 7,000 counterfeit Rolex watches marking “the grand finale of an international multimillion-dollar federal counterfeiting case some 20 years in the making – unveiled on World Intellectual Property Rights Day.” Counterfeit Rolex manufacturer Binh Cam Tran “started as a legitimate watchmaker on Jewelers Row on Sansom Street near 7th, then got into the counterfeit world, said John Kelleghan, special agent in charge of the Office of Investigations for US Immigration and Customs Enforcement here. He ended up manufacturing the watches in his North Philadelphia rowhouse and kept moving to better quarters – ending up in Elkins Park, where he owned a fleet of Lexus cars.” WCAU-TV Philadelphia (4/27) and KYW-AM Philadelphia (4/27, Glovas) cover the bulldozing on their websites. WCAU-TV Philadelphia (4/26) aired a report on the bulldozing, as did WTXF-TV (4/26/2010).

KRGV-TV Rio Grande Valley (4/27/2010) reports approximately “$1.1 million of counterfeit merchandise was seized from two locations in the South Texas area in April. It was part of a nationwide seizure announced by the federal partners of the National Intellectual Property Rights Coordination Center (IPR Center). In total, more than $263 million worth of counterfeit merchandise was seized around the country.” DHS Assistant Secretary for ICE John Morton “revealed these results at an observance of World Intellectual Property Day at the IPR Center in Arlington, Virginia.” KABB-TV San Antonio (4/26/2010) also aired a report on the results of Spring Cleaning.

Counterfeit Nikes Seized In New Jersey. The AP (4/27/2010) reports ICE officials announced the seizure of “15,000 pairs of fake Nike shoes at Port Elizabeth as part of a nationwide sweep of counterfeit products. … They say more than 700,000 fake items were found in 30 cities during Operation Spring Cleaning. The counterfeit goods included medicines. … ICE spokesman Harold Ort said the Nike sneakers found in two shipping containers in New Jersey were worth $1 million.”

New York City Crackdown On Counterfeiters.

April 26th, 2010

Photo above: Michael R. Bloomberg

Mayor Michael R. Bloomberg, Chief Advisor to the Mayor for Policy and Strategic Planning John Feinblatt and Director of Special Enforcement Shari C. Hyman today announced a $800,000 payment to the City that settles the “Counterfeit Triangle” case and reopens a key block of Manhattan’s Chinatown.

The City will receive the payment from the owners of a single triangular block that was notorious for the sale of counterfeit goods. The lawsuit, a civil nuisance abatement action, was filed after a February 26, 2008 raid that shuttered 32 storefronts selling counterfeit goods. Under the terms of the settlement, the property owners must use the building, bounded by Canal, Centre, and Walker Streets, for legitimate purposes.

“Property owners should know that they are responsible for what goes on in their buildings and that hosting illegal activity like counterfeiting is a losing proposition,” said Mayor Bloomberg. “Counterfeiting deprives legitimate businesses of customers and their employees of their paychecks. We will continue to go after the street-level counterfeiters, the wholesalers, and the property owners that look the other way.”

In the raids that triggered the lawsuit, the Mayor’s Office of Special Enforcement seized counterfeit trademarked products, including counterfeit watches, jewelry and handbags purporting to be from Rolex, Tiffany, Coach, Gucci, Chanel and others. These products had an estimated street value of over $1 million.

“Selling counterfeit goods is a form of organized crime it is built on forced sweatshop labor, often done by children and frequently accompanied by violent turf wars,” said John Feinblatt, Chief Advisor to the Mayor for Policy and Strategic Planning. “Counterfeiting has been involved in every illegal enterprise from money laundering to supporting terrorism. This remains an ongoing problem, but we will continue to go after any property owners that look the other way while their tenants flout the law.”

“Counterfeit goods are inferior products that cheat everyone, from the consumer who purchases a poorly-made item, to the legitimate business owners cheated of sales, to the City who loses tax revenue,” said Shari C. Hyman, Director of the Mayor’s Office of Special Enforcement. “Property owners should know that if they play host to illegal vendors, we will use the Nuisance Abatement law to shut down the buildings and exact a serious financial penalty.”

Mayor Bloomberg created the Office of Special Enforcement by Executive Order in December, 2006. It replaced the former Office of Midtown Enforcement and expanded its activities to all five boroughs. The Office of Special Enforcement is responsible for coordinating enforcement efforts across City agencies to address quality of life issues related to notorious adult use locations, lawless clubs, trademark counterfeiting bazaars and illegal conversions of apartment buildings into hotels.

The Office of Special Enforcement and its predecessor has, since 2003, shut down 36 counterfeiting locations, seized some $52 million in knock-off goods and forced building owners and counterfeiters to pay $3 million in fines to the people of New York City.

Drug Safety: An Update From The FDA.

Before the Committee on Energy and Commerce Subcommittee on Health, U.S. House of Representatives, March 10, 2010

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, I am Dr. Joshua M. Sharfstein, Principal Deputy Commissioner at the Food and Drug Administration (FDA or the Agency) in the Department of Health and Human Services (HHS). Thank you for the opportunity to discuss the safety of the American drug supply.

Protecting Americans from unsafe or contaminated drugs is not just an important responsibility of FDA-it is our core charge. Drug safety was the primary reason for the passage of our guiding statute. In 1937, more than 100 people, including many children, died from ingesting Elixir Sulfanilamide, which contained the deadly poison diethylene glycol. Congress then passed, and President Franklin D. Roosevelt signed, the Federal Food, Drug, and Cosmetic Act (FD&C Act) to prevent future catastrophes.

And yet, as you know, the threat remains.

I would like to thank the Subcommittee for its leadership on this issue. Numerous hearings in this chamber have helped the public understand the challenge of regulating a global marketplace. Members of this Subcommittee, along with the Chairman of the full Committee and the Chairman Emeritus, were key architects of the Food and Drug Administration Amendments Act of 2007 (FDAAA), which gave the Agency significant new authorities and resources to address postmarket safety. In this testimony, I will address two important issues: import safety and the implementation of the drug safety authorities in FDAAA.

IMPORTS

As the Subcommittee’s work has documented, globalization has created new risks and challenges for the safety of the drug supply. Where Americans once used drugs that were mostly manufactured domestically, now up to 40 percent of the drugs we take are imported, and up to 80 percent of the active pharmaceutical ingredients in the drugs we use are from foreign sources. In addition to the growth in the sheer volume of imports and foreign facilities, there has been an increase in the variety and complexity of imported products, and a large expansion in the number of countries involved in producing these products-including many with less sophisticated regulatory systems than our own. Simultaneously, the supply chain from raw material to consumer has become more and more complex, involving a web of repackagers and redistributors in a variety of locations. This makes oversight significantly more difficult and leaves weaknesses through which counterfeit, adulterated, and misbranded products might infiltrate the legitimate supply chain.

A few examples:

* In 2007 and 2008, contaminated heparin (a blood-thinning drug) came from China and was linked to deaths and a number of serious allergic-type reactions here at home.

* In 2007, Xenical (orlistat) capsules ordered over the Internet were found to be composed only of talc and starch.

* In January 2010, counterfeit Alli (orlistat) was discovered, which did not contain the active ingredient but instead contained varying amounts of the stimulant sibutramine, which can lead to serious toxicity if used by people with certain cardiac diseases.

These are global problems. Contamination and counterfeit drugs represent a much greater threat in the developing world, where the systems of laws and regulatory oversight do not afford much protection. And these problems can pose a risk to us at home, when, for example, patients do not get fully treated for infection abroad because of ineffective drugs and as a result, drug resistance intensifies.

Photo above: Fake drugs are made on equipment like this in filthy conditions.

Photo below: Fake drugs are re-labeled and re-packaged so they look “genuine”. This puts you at risk. This could kill you.

When the modern FDA was created in 1938, imports were a tiny part of the products used in our country. Our focus was on stopping harmful products at the border through inspections of imported goods. This approach is adequate to the challenge when the volume is small. But it fails when an estimated 20 million shipments of FDA-regulated imports come into the country each year. To fulfill our public health mission in a global age, FDA must adopt a new approach-one that addresses product safety by preventing problems at every point along the global supply chain, from the raw ingredient through production and distribution, all the way to U.S. consumers.

We are moving from an approach based on reacting to problems to one that proactively prevents such problems from ever occurring. In the food arena, this approach to prevention is embodied in legislation passed by this Committee and the full House of Representatives, and which is now awaiting action in the Senate. This bill would for the first time allow FDA to establish basic preventive controls throughout the food production process and give the Agency strong enforcement authorities and resources to meet these obligations.

In the arena of drugs and other medical products we are taking a number of steps to begin making this shift within our current authorities.

First, we are seeking better controls at the point of production, wherever that may be.

We now have permanent FDA offices in Beijing, Shanghai, and Guangzhou, China, in New Delhi and Mumbai, India, in San Jose, Costa Rica, Mexico City, Santiago, Chile, and soon, Amman, Jordan. These offices enable us to have a regional presence around the world, a home base from which to undertake a range of important activities, including building regulatory capacity. We now have more than 30 agreements with foreign counterparts to share inspection reports and other nonpublic information that can help us make better decisions about the safety of foreign products. So if a shipment of contaminated drugs shows up in a port in Italy, we will hear about it swiftly and be on the lookout for products from the same shipper.

Second, we are working with industry to help them strengthen the safety of their supply chains. In this day and age, companies should be able to effectively demonstrate that safety, quality, and compliance with international and U.S. standards are built into every component of every product and every step of the production process. Some companies already do a terrific job at this, tracking where and how their products and their components are made and the path taken to reach our shores. In fact, I have met with some companies that react with incredible swiftness to questions about the integrity of their supply chain. Obviously they have a vital interest in ensuring confidence in the safety and quality of their products and their brand. These best practices need to become standard practice throughout industry.

There is much more to be done. As Secretary of Health and Human Services Kathleen Sebelius noted when she appeared before this Committee on February 4, 2010, FDA needs additional tools to move our oversight capabilities into the 21st century. FDA needs to access regulatory information quickly, hold all parties responsible for the quality of products in the supply chain, and have reasonable and reliable options for enforcement.

DRUG SAFETY AUTHORITIES IN FDAAA

I will now turn to the drug safety authorities in FDAAA, a milestone legislative achievement that has helped the Agency protect the public health in many different ways.

Because no amount of premarket study can provide the full information about what the benefits and risks of a new drug will be when it is used by the general population, FDAAA provided important new authorities to enhance our ability to monitor approved drugs after they are marketed and to take definitive action when needed. Under FDAAA, FDA can require drug sponsors to conduct postmarketing studies and clinical trials, make certain safety-related labeling changes, and develop and put into place risk evaluation and mitigation strategies (REMS)-all with the goal of better identifying and managing the risks of drugs on the U.S. market.

Here are some details.

With respect to label changes, as of February 28, 2009, FDA had used its new authorities to require safety label changes in individual or classes of drugs 32 times since March 25, 2008. For example, FDA required safety label changes to add the risk of a life-threatening neurological disorder to the prescribing information for certain antidepressants, and changes to the prescribing information of a class of antibiotics to warn about the risk of tendon rupture.

With respect to risk management, if FDA determines that a REMS is necessary to ensure that the benefits of a drug outweigh the risks of the drug, FDA can require manufacturers to have a REMS in place when a drug comes on the market, or implement one later if FDA becomes aware of new safety data . The authority to require REMS provides FDA a very useful set of tools that can be used to reduce the risks of marketed products, while allowing patients to benefit from lifesaving and other beneficial treatments that could not be safely marketed without a risk management program.

In the design of REMS with elements to ensure safe use (the most comprehensive REMS programs), FDA is mindful of the provisions in FDAAA stating that the elements to ensure safe use must be, among other things, commensurate with the specific serious risk listed in the FDA-approved labeling of the drug, not be unduly burdensome on patient access to the drug, and be designed to be compatible with established distribution, procurement, and dispensing systems for drugs.

Most of the REMS with elements to ensure safe use include educating prescribers about the risks and appropriate use of the drug as a condition of certification or enrollment in the REMS program. Other programs require enrollment by pharmacists and sometimes patients as well. Some programs require the prescriber to monitor the patient immediately following drug administration and for a period of time afterwards. Each of these programs is designed to provide critical information to clinicians without unduly restricting access to the drugs.

We have learned that designing and implementing the most comprehensive REMS requires a careful balancing of the need to adequately manage risks and also to maintain patient access to important medications. Since using this authority is a work in progress, FDA is committed to addressing the concerns we have heard from prescribers, pharmacists, distributors, and payers about their roles in implementing REMs and from patient groups about the effects of REMS on access to needed products, and are planning to hold a public meeting to hear from these and other stakeholders. Additional implementation challenges include ensuring consistency in the handling of safety problems with all products, including over-the-counter (OTC) products and generic drugs; the lack of clarity in certain provisions of the law with respect to REMS; and burdens imposed on application holders and FDA that do not contribute significantly to drug safety. We would be very happy to discuss the lessons we have learned over the last two years with Congress and work together to fine tune the program so that it can be even more effective in improving public health.

Sentinel Initiative

FDAAA requires the HHS Secretary to develop methods to obtain access to disparate data sources and to establish a postmarket risk identification and analysis system to link and analyze health care data from multiple sources. On May 22, 2008, FDA launched the Sentinel Initiative with the ultimate goal of creating and implementing the Sentinel System-a national, integrated, electronic system for monitoring medical product safety. The Sentinel System, once up and running, will enable FDA to actively gather information about the postmarket safety and performance of its regulated products-a significant step forward from our current, primarily passive safety surveillance systems. The law sets a goal of access to data from 25 million patients by July 1, 2010, and 100 million patients by July 1, 2012. FDA has gathered public input on issues related to the creation and development of Sentinel, held numerous meetings and a public workshop, and established a working group consisting of representatives of numerous federal agencies to share information and discuss issues related to ongoing efforts that are complementary to Sentinel. FDA has awarded key contracts for a pilot project to gather information that will be essential to fully implementing the Sentinel System.

Track and Trace

FDAAA also required the development of standards for the identification, validation, authentication, and tracking and tracing of prescription drugs as a step towards further securing our nation’s drug supply. Very shortly, FDA will issue a guidance establishing a standard for unique identification for prescription drug packages, which ultimately will help in identifying the whereabouts and authenticity of drug packages and distinguish them from counterfeits.

SAFE USE INITIATIVE

Before I close, I would like to briefly mention a new drug safety initiative at FDA called the Safe Use Initiative. Every approved drug has both benefits and risks. Underlying FDAAA is the principle that Congress wants to see the benefits maximized for patients and the risks minimized. We all want patients to get better on medication and avoid unnecessary injuries, even death, as a result of preventable medication errors or misuse. In November 2009, we announced the launch of FDA’s Safe Use Initiative. Through this initiative, FDA will identify, using a transparent and collaborative process, specific candidate cases (e.g., drugs, drug classes, and/or therapeutic situations) that are associated with significant amounts of preventable harm. FDA will then work with hospitals, doctors, nurses, patient groups and others to recognize and mitigate these risks. In a voluntary complement to the REMS program, we will use our understanding of drug risk as a tool to gather partners together and develop and implement strategies for progress.

CONCLUSION

Over the last seven decades, so much has changed in pharmaceutical science and drug regulation. Yet in 2007, when scores of patients died of contamination in Bangladesh, and in 2006 when children died in Panama, the culprit was familiar. It was diethylene glycol, or DEG-the very same poison that had led to the passage of the FD&C Act in 1938.

FDA’s work is far from done. The scientists, doctors, nurses, inspectors, and other public health professionals who make up FDA thank you for your support and confidence in our mission.

Thank you very much for the opportunity to testify today. I welcome your ideas and your questions.